Friday, April 23, 2010

Republican opponents of the new health reform overhaul legislation must be dancing in the streets now as a new government report suggests what they have argued all along -- that health care costs will increase with seniors on Medicare taking the biggest hit.

A so-called panel of impartial economic experts at the Health and Human Services Department said the billions of dollars cut in Medicare, in particular, may be unrealistic and unsustainable. It also said the legislation will achieve President Obama's goal of adding 34 million Americans to health insurance coverage.

White House officials repeatedly claim such analyses have been too pessimistic, low-balling the law's potential savings.

The bad news coincided with a Congressional Budget Office revised estimate that 4 million Americans will be penalized for not buying health insurance as mandated in the law beginning in 2014.. This section of the overhaul legislation is being challenged in court by 13 states.

The Health and Human Services report carried a disclaimer from the Medicare's Office of the Actuary claiming the analysis does not represent the official view of the Obama administration.

The report said most of the costs will be sustained in the first decade because taxes on so-called Cadillac coverage by high income earners won't take effect until 2018.

"During 2010-2019, however, these effects would be outweighed by the increased costs associated with the expansions of health insurance coverage," wrote Richard S. Foster, Medicare's chief actuary. "Also, the longer-term viability of the Medicare ... reductions is doubtful." Foster's office is responsible for long-range costs estimates.

Rep. Dave Camp (R-Michigan) said the increased costs were expected all along and that the Medicare cuts will undermine coverage for seniors and require higher premiums. Other Republicans charged during the 15-month debate that health coverage for seniors would be rationed.

The health care law, passed by a divided Congress after bitter partisan debate, would create new health insurance markets for individuals and small businesses. Starting in 2014, most Americans would be required to carry health insurance except in cases of financial hardship. Tax credits would help many middle-class households pay their premiums, while Medicaid would pick up more low-income people. Insurers would be required to accept all applicants, regardless of their health.

In effect, the report indicated Obama's goal of near universal coverage being offset by cost-savings reforms missed the mark by $311 billion between 2010 and 2019. Translated into total health care spending during the decade, the amount surpasses $35 trillion.

The U.S. spends $2.5 trillion a year on health care now, far more per person than any other developed nation, and for results that aren't clearly better when compared to more frugal countries. White House officials argue the increase is a bargain price for guaranteeing coverage to 95 percent of Americans.

In addition to flagging the cuts to hospitals, nursing homes and other providers as potentially unsustainable, it projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular program. Enrollment would plummet by about 50 percent, as the plans reduce extra benefits that they currently offer. Seniors leaving the private plans would still have health insurance under traditional Medicare, but many might face higher out-of-pocket costs.

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EPILOGUE

This report and an anticipated more to follow as the 2,400-page health reform law is dissected, adds ammunition to the arsenal Republicans plan to attack Democrats in the midterm elections. No Republican Congressman voted for the bill on the political gamble it would fail -- even if it was passed. Depending on the wording, few polls reflect voters view the law favorably. Despite the front loading of good features -- such as preventing insurance companies from dropping patients with preexisting conditions -- the full impact of the law will not be realized for at least five years and definitely not by the midterm elections just six months from now.

Readers comments are welcome as long as they remain civil. We reserve the right to delete any comments that are vulgar, libelous and totally irrelevant to this posting. -- Jer

1 comment:

Anonymous
said...

This was known before health care reform passed.

Over the next decade, the Affordable Care Act expands coverage, and offsets the cost with a mix of new taxes and spending reductions. It's not supposed to control costs over this time. It will provide coverage to some 30 million people who don't have it, while only expanding total spending by less than one percent. That's what it's supposed to do.

Then, after 2019, the cost controls kick in and the total spending on health care will be reduced. Conservatives are attempting to draw sweeping conclusions from only half of the available information and make it fit into their anti-HCR talking points. An honest criticism would acknowledge the fact that this information was known a year ago and include post-2019 cost projections.

This demonstrates the "epistemic closure" of the conservative mind we've been hearing so much about lately.

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Welcome: An intelligent and articulate discussion is desired in these days of partisan politics. These postings are commentary on national politics, current events, sports and any other stuff that generates civil conversation. My career in the newspaper business extends more than 25 years at the Klamath Falls Hearld & News, Tustin News, Orange Daily News, Santa Ana Register and San Diego Evening Tribune. Son of a vegetable farmer, I was raised in the predominately Mexican village of San Juan Capistrano. At age 11, my family moved to the nearby coastal city of Laguna Beach where body surfing became my favorite sport. I attended the private Webb School of California near Pomona. I graduated majoring in political science at the University of California at Davis. After my newspaper career, I became a landscape contractor in San Diego for 10 years and then groundskeeper for a RV resort on the bank of the Rogue River seven miles east of Gold Beach, Ore. I resumed my writing career, first with emails, and later launching this blogsite in 2007.